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Wednesday, September 30, 2009

Marion Co. Prosecutor Carl Brizzi gleefully announced a couple of weeks ago that Desmond Turner, the man accused of executing seven family members in a home on Hamilton Avenue in 2007, had agreed to a trial by a judge facing a life sentence without parole in consideration for the prosecutor's office removing the death penalty option from the case. Brizzi noted the cost savings to the county and the support his office had in the decision from the family members of the victims. The family members are now saying something quite different. They want the death penalty imposed, and they believe Brizzi's office withheld key information in the case from them. WRTV's Rafael Sanchez reports:

Janie Covarrubias, whose father and two younger brothers were among those killed in 2006, told 6News' Rafael Sanchez Wednesday that she and other family members consented to the deal before learning all of the facts in the case against Desmond Turner, 31.

"I was just recently allowed to see the murder pictures and the autopsy pictures. After seeing those pictures, I don't see any reason why he should be allowed to live," she said.

Turner earlier this month waived his right to a jury trial so that the state wouldn't seek the death penalty in the case.

The Marion County Prosecutor's Office said that the deal will save the county tens of thousands of dollars and ensure Turner spends the rest of his life in prison if prosecutors win their case before the judge.

But Covarrubias called the option of life without parole ridiculous, and said that even though she had spoken out against the death penalty before, she thought it was the only option in the case.

"I was told by the prosecutors that it's hell for them to be sitting in a cell for eight hours a day. (Well) it's been hell for me for the past three years not having a father and not being able to grow up with my two youngest brothers," she said. "They're trying to get away with something horrendous that they did. They murdered seven people in cold blood."

The mishandling of this case by the prosecutor's office is just another in a string of embarrassments for Brizzi. Many Republicans are quietly hoping Brizzi opts against seeking re-election sooner rather than later so the party has some chance at salvaging the office with another viable candidate.

There's nothing like kicking people when they're down. That's exactly what the Ballard administration has decided to do to Indianapolis residents by seeking a 35% water rate increase on top of an earlier-approved 11% increase in the midst of the worst economic downturn since the Great Depression. You read that right. A filing has been made with the IURC to increase water rates 35% despite the IURC's blistering Order in June scaling back an emergency rate hike from 17.5% to 11%. The IURC made it clear that the water company had failed to justify planned capital improvements, and it condemned its "profoundly disturbing" one-sided agreement with Veolia, the French-owned company that operates the water company.

This new rate increase is on top of the double-digit increases the City has already implemented to make the necessary sewer and wastewater treatment improvements to comply with the federal Clean Water Act. The water company claims it has $23.2 million in unfunded projects that are mandated by federal EPA. It's funny that the water company couldn't justify those projects in its emergency rate hike earlier this year. Not surprisingly, the contractors and consultants who will do this work have contributed hundreds of thousands of dollars to Ballard's re-election campaign. I guess it's more important to take care of campaign contributors than to look out for the interest of Indianapolis residents.

It's also worth noting that the City recently began efforts to find new partners to help manage or own the waterworks and wastewater treatment facilities of the City. The Ballard administration has boasted that it can potentially net a couple of hundred million dollars that can be used for other infrastructure improvements if it turns over these assets to someone else. It looks to me like the City is trying to shove through as many rate hikes as possible prior to entering into such a transaction to increase the value of the assets to potential buyers. It looks like a short-term gain for the people looking to find more money to spend prior to the next election, while Indianapolis residents will be the long-term losers who will be saddled with paying for the past, poor decisions of the people entrusted with managing these assets.

If Marion County voters ever had a reason to have pause about approving a more than $700 million bond issue to build a new Wishard Hospital, it need look no further than the agreement St. Francis Hospitals entered into with the Justice Department admitting to submitting false claims to Medicare. St. Francis has agreed to pay the federal government more than $6 million to settle the government's claim that it over-billed Medicare. "Hospitals that overcharge Medicare drain critical funds from the Medicare program and increase health-care costs," Daniel Levinson, inspector general for the U.S. Department of Health and Human Services, said in a statement. "This settlement demonstrates the federal government's resolve to address this kind of fraudulent conduct."

This case against St. Francis is peanuts compared to the potential case the federal government could pursue against the Marion County Health & Hospital Corporation. HHC has concocted a scheme to bilk the federal government's Medicaid program out of potentially hundreds of millions of dollars. Under the scheme, HHC is leasing a chain of nursing homes across the state of Indiana from Eagle Care, Inc. HHC, in turn, leases the facilities back to American Senior Communities, a for-profit nursing home company. Creating the illusion that these facilities are owned by a county hospital providing indigent care, HHC is able to get reimbursements from Medicaid at about double the rate other nursing homes receive. While an average nursing home collects close to $4,000 per resident per month, HHC is collecting about $8,000 a month for those same residents according to figures Carl Moldthan of the Indianapolis Taxpayers Association obtained from HHC. It is these revenues that HHC is relying upon to finance at least $38 million a year it anticipates will be needed to pay debt service on the bonds.

It's only a matter of time before other nursing homes start complaining to the federal government and the Justice Department steps in and reviews HHC's Medicaid reimbursements. Further, the Obama administration has already stated it will find more than $600 billion in Medicare and Medicaid cuts over the next ten years to help pay for his health care plan. If the government puts a stop to this scheme, HHC will have to turn to Marion County property taxes and levy new property taxes to make up the difference. It will not need approval from Marion County voters to do this if voters approve the November special election referendum. That referendum will allow HHC to pledge property tax revenues to finance the bonds. It's a house of cards just waiting to fall. And when it does, Marion County property taxpayers will face one of the largest tax increases in history.

Shirley Pinner has lived at the same home on Temple Avenue in Indianapolis for the past 30 years. On August 24, her neighbor's pit bull dog attacked her and caused serious bite wounds to her arm. The attack has left her with recurring nightmares, anxiety attacks and fear of walking outside her own home to sit on the porch. Believe it or not, the dog that attacked Pinner and another pit bull that was apparently roaming freely in the neighborhood the day of her attack were never seized by Animal Care & Control. According to an e-mail Pinner's granddaughter, Yolonda Madison, received from IACC Director Doug Rae, city prosecutors determined that the injuries caused to Pinner by the pit bull did not constitute "serious bodily injury". As a consequence, Rae claimed IACC was without authority to impound the dog, noting the dog owner had no prior violations. In an e-mail to Councilor Mike Speedy, Madison complains about the lack of responses she received from the City in response to the concerns she raised in her grandmother's case. She complains that she received no responses from Mayor Ballard, Public Safety Director Mark Renner, Drew Carlson in the Corporation Counsel's office or Media Wilson, Director of Community Outreach for IACC. Rae sent a lengthy e-mail to Madison explaining what had transpired in the case. Given the number of serious pit bull attacks within the City over the past year, one would think there would be no debate over whether to impound the dog in question.

UPDATE: Fellow blogger Paul Ogden has more on the debate over whether IACC Director Doug Rae should stay or go. The Ballard administration recently placed him on probation and canned the IACC advisory board's chairman, Warren Paititz.

UPDATE II: WRTV's Joanna Massee has followed up with an excellent story of her own here. Councilor Mike Speedy calls on the City to impound the dog that bit Pinner. The corporation counsel's office gives Massee the impression that decision hasn't been made yet, even though e-mail communications to Pinner's granddaughter from IACC's Rae made clear the city prosecutors had already determined the dog would not be impounded. Maybe they're just reconsidering because of the focused public attention on the case.

Tuesday, September 29, 2009

Many Indianapolis politicos yawn when I express concern about how much influence is peddled in the City of Indianapolis through free tickets to Colts and Pacers games that are doled out to politicians by the Capital Improvement Board, the franchise team owners and state and city lobbyists. The public corruption trial of Kevin Ring, who worked as a lobbyist for disgraced D.C. lobbyist Jack Abramoff and later for Barnes & Thornburg's Washington, D.C. office, points up just how much money is spent on sporting events by lobbyists. The National Journal reports that evidence has been tendered in Ring's trial by the prosecution showing that Abramoff's lobbying firm spent more than $5 million over a four-year period on sporting events at Camden Yard, FedEx Field and the MCI Center. That was just the amount spent on suites and did not include any additional money the lobbying firm spent on extra tickets, food and drinks. According to trial testimony by another colleague, Ring justified giving Super Bowl tickets and a free trip to the game to two congressional staffers as a "tribute" to members of Congress to give the appearance the trip didn't violate congressional ethics rules. The Ring associate, Todd Boulanger, told jurors that Team Abramoff used the same "lobbying tools" as other lobbyists in Washington.

Thanks to Sandra Chapman's hard-hitting, 13 Investigates piece on the City of Indianapolis rewarding Perry Township Trustee Gary Coons with the Public Safety Liaison job for driving the Perry Townshp Fire Department merger with IFD, Coons is giving up his township trustee's job. In a follow-up report, Chapman learned that the public liaison position did not exist prior to the fire department merger and was created with Coons in mind for the position. The City only advertised the position for five days before giving the $64,000 a year job to Coons. Coons intended to work both jobs full-time until Chapman broke the story. His Township Trustee's job pays $51,000 a year. In the aftermath of Chapman's report, Coons is now asking the Republican Party to pick a replacement for him as Perry Township Trustee, which is what should have happened in the first place. As a Republican, I find it troubling that our Republican-run city administration is using government jobs for what appears to be quid pro quos just like the Bart Peterson administration. We were promised a more ethical city government, and some of us expected that to happen.

Chapman also uncovered other township trustees in Marion County working other jobs. Washington Township's Frank Short works as a self-employed lobbyist, and is paid $45,000 a year to be township trustee. Warren Township's Jeff Bennett works as a part-time manager for the Indianapolis Housing Agency. Township trustees in Center, Decatur, Franklin, Wayne and Pike Townships work full-time. Russ Brown recently was appointed to take the place of Mike Hobbs in Lawrence Township. Hobbs worked full-time as that township's trustee. Chapman's report did not indicate whether Brown will continue his employment as an attorney in addition to his township trustee's duties.

Chris Cillizza of the Washington Post's "The Fix" has named who he thinks are the best state-based political reporters in each of the 50 states. His choices in Indiana are: the Star's Mary Beth Schneider, the Louisville Courier-Jounnal's Lesley Stedman Weidenbener and Brian Howey of Howey Political Reports. Congrats to all three. Eat your heart out, Jim Shella.

Monday, September 28, 2009

This is the true story of a Real World alumnus, Sean Duffy, deciding to find out what happens when you stop being polite and get real by running for Congress in Wisconsin to unseat a 40-year incumbent, U.S. Rep. David Obey (D-WI). Duffy, an alumnus of The Real World Boston season many years ago has been serving as the elected District Attorney of Ashland County for the past seven years. Duffy is married to Rachel Campos, a former cast member of The Real World San Francisco, which is best remembered for its outcast member, Puck. Most of the The Real World cast members disqualify themselves from potential political careers because of their irrational and embarrassing moments caught on camera. Duffy was one of the few cast members who managed to make it through a season unscathed. This should prove to be an interesting race. I never imagined someone from The Real World getting into politics, let alone being a Republican.

While Indianapolis attorney and former Indiana Secretary of State Joe Hogsetttook himself seriously as a Democratic candidate for the 2011 Indianapolis mayor's race, few people within his own party felt the same way. Some wondered why he would think the party would nominate a three-time loser to one of the most coveted political offices in the state. Others wondered why the partners at his law firm would allow his candidacy to potentially wreck the firm's much-coveted legal work for the Capital Improvement Board, a gig worth about a million a year thanks to a decision early in the Ballard administration to continue using the firm despite the considerable financial support it provided to Bart Peterson's re-election campaign in 2007. Not even his former boss, Sen. Evan Bayh, was expected to lend any support to a Hogsett mayoral campaign. And jokes were already circulating about whether he would take a new wife, something that has coincided with some of his prior electoral bids. Local Democratic blogger, Terry Burns of Indianapolis Times, broke news of Hogsett's early departure from the race today. To date, only the campaign of Democratic candidate Melina Kennedy, a former deputy mayor to Bart Peterson and unsuccessful candidate for Marion Co. Prosecutor, appears to be getting serious traction in this race.

Sunday, September 27, 2009

A feature story in the Sunday edition of the Star tells us that ACORN has ceased business operations in Indiana. Its Gary office, the one that produced all of those fraudulent voter registrations during last year's presidential campaign, closed down in May. The last employee in the Indianapolis office was recently furloughed. Although reporters Jon Murray and Mary Beth Schneider note that Congress recently voted to cut off federal funding to the group, they completely ignore the fact that U.S. Rep. Andre Carson was one of only 75 members of the House to vote against cutting off funding and the only member of the Indiana congressional delegation to do so. If you didn't read Advance Indiana, you would never know how Carson voted on that issue. Ironically, the story notes the organization's continued participation in a lawsuit against the State of Indiana claiming its welfare offices aren't making sufficient efforts to register welfare recipients to vote.

Saturday, September 26, 2009

This is what we are up against, folks. The news media outlets in this town are deliberately lying to the public about the Wishard Hospital referendum, just like the Health & Hospital Corporation is. The Sunday edition of the Star is carrying an editorial in support of the referendum that continues to spread lies to deceive the public into supporting the referendum. "Again, no tax increase is being presented on Nov. 3," the editorial reads. Uh, did anyone on the editorial staff bother to read the public notices the newspaper ran in this week's Star? Those public notices make clear the new debt will be backed by increased property tax levies. While the editorial acknowledges the "whopping size" of the hospital project, it asserts that it "will require no new tax dollars, Wishard leaders have pledged." "[T]he bill will be paid by a combination of philanthropy, cash flow for services, and $150 million Wishard has on hand," the editorial assures us. Citing Mayor Greg Ballard's and the Greater Indianapolis Chamber of Commerce's support for the Wishard referendum, the Star tells us "[t]heir endorsement vouches for the incalculable importance of Wishard to the health and social progress of Central Indiana, as well as its $1.2 billion annual impact on the local economy." And these are the same folks who supported the bailout of the Capital Improvement Board with higher taxes and increased debt. Marion County's combined debt is now more than $4 billion. With this latest proposed borrowing, taxpayers will be footing the bill for at least $5 billion in borrowed funds.

I know Matt Gutwein and all the other proponents of the new Wishard Hospital with a financial stake in the outcome have been busy telling everyone that the Health & Hospital Corporation can borrow more than $700 million to build a new hospital and not have to raise your property taxes one dime, but the little-discussed public notices the HHC is legally required to run in the Indianapolis Star tells quite a different story.

Let's begin by setting the record straight. According to the public notice, the Marion County Building Authority and not the Health & Hospital Corporation will be issuing general obligation bonds and revenue bonds. The total bond issue is expected to be $703,400,000. Interest costs may add an additional $830 million to the project over a 30-year period. A smaller amount of Build America bonds will also be issued, although the public notice does not specify the amount. The HHC intends to lease the new hospital facility from the Building Authority over a 30-year period at an annual cost of $54.8 million. Total lease payments payable by the HHC to the Building Authority are estimated to be $1.478 billion.

The HHC currently has a certified tax levy of $3.7 million and is levying $0.0085 per $100 of assessed value for its debt service fund. After these new bonds are issued, the certified tax levy amount is expected to climb to $54.8 million based with a tax levy of $0.1494 per $100 of assessed value.

The public notice makes it abundantly clear that repayment of the bonds is secured by property taxes. If the bond referendum is approved, the HHC will have the ability to levy up to $41.73 million annually in higher property taxes, making it one of the largest property tax increases in Marion County history. Remember, once a project like this is approved, it will fall outside the protection of the property tax caps that limit the amount of property taxes local governments may collect based on a percentage of a property's assessed valuation. More importantly, none of these facts are laid out in the public referendum question that will be put to voters in the November special election. It doesn't even state expressly that the bond proceeds will be used to build a new hospital! Here's the bond referendum language. Note how misleading and uninformitive it is.

“Shall the Health and Hospital Corporation of Marion County, Indiana, issue bonds or enter into a lease to finance safe, efficient and functional facilities for the Wishard Hospital project:

1.to allow Wishard to provide access to care for all residents of Marion County, including people who are seniors, poor, uninsured or vulnerable regardless of their ability to pay; and

2.to allow Wishard to provide specialized care, including to victims suffering from traumatic injuries or severe burns; and

3.to allow Wishard to work with colleges and universities, including Indiana University School of Medicine, Ivy Tech Community College, and the Purdue School of Pharmacy, to teach future doctors, nurses and other healthcare professionals in Indiana?”

Friday, September 25, 2009

Sometimes when you're ahead in a discussion you need to know when to just sit down and stop talking. That's advice Health & Hospital Corporation CEO Matt Gutwein is going to learn the hard way. The well-spoken advocate for the $754 million hospital referendum to be voted on at a special election in November is starting to get tripped up with the facts as he takes his "razzle and dazzle them" show on the road to neighborhood group meetings around the county. While Gutwein is typically faced with softball questions at these meetings, he has recently been facing tougher questions. Take for example his recent appearance before the Marion County Alliance of Neighborhood Associations. McANA President Cathy Burton asked a straightforward question of Gutwein. "If you're not raising property taxes to fund the new hospital, then why are you required to obtain voter approval at a referendum," she asked. How Gutwein answered the question and what he avoided saying proves my point that the HHC is lying to the voters when they tell them that no property tax increases will be required to pay off the bonds on the new hospital.

Gutwein explained to Burton that the referendum is required because the HHC is issuing general obligation bonds. Bingo! A governmental body can't issue general obligation bonds unless it is pledging to the bondholders that it has taxing authority to levy sufficient property taxes from property owners to repay the bonds with interest. Indeed, the little-noticed public notice that ran in the Indianapolis Star this week makes this abundantly clear. The notice reads, in part:

All or any portion of the Health and Hospital Corporation’s payments of principal of and interest on the General Obligation Bonds and/or rental payments under the Lease may be payable from ad valorem property taxes collected by the Health and Hospital Corporation on all taxable property within the geographical boundaries of Marion County, Indiana. The proposed General Obligation Bonds and Revenue Bonds (collectively, the “Bonds”) shall be issued in an original aggregate principal amount not to exceed $703,040,000. The maximum term of each series of the Bonds will be 30 years, and the Bonds will bear interest at a rate or rates estimated not to exceed 6.16% per annum. Dated this 25th day of September, 2009.THE HEALTH AND HOSPITAL CORPORATION OF MARION COUNTY By: Dan Sellers, Treasurer (S - 9/25/09, 10/2/09 - 5543528) - 09/25

Gutwein couldn't leave well enough alone when answering Burton's question. He distinguished this bond issue from the CIB's problems in paying the costs to operate Lucas Oil Stadium. Gutwein claimed the CIB relied on revenue bonds to pay for the new stadium and that it faced difficulty in paying for the costs because it relied on a stream of revenues that was insufficient to cover the costs. That statement was patently false. The State of Indiana, not the CIB, financed the construction of Lucas Oil Stadium. While it is true it relied upon revenue bonds funded by new taxes on food and beverages, which are being collected on a regional basis, those tax revenues have proven to be more than adequate to fund debt service on the stadium. The CIB merely leases the stadium from the State and because it entered into a one-sided agreement with the Colts that essentially gives up all stadium revenue-generating opportunities to the team, it lacks any income to pay for the operating and maintenance expenses, which are considerably higher for LOS than the RCA Dome.

Proponents of the CIB bailout always assured the public they wouldn't raise property taxes to shore up the CIB's finances. As I previously explained to the readers of this blog, the CIB has no present authority to levy property taxes without council approval so that was never a real option. This is not the case with the HHC. It has the authority to levy property taxes, which means it can issue general obligation bonds backed by property tax levies. Gutwein has repeatedly claimed that the HHC plans to rely upon discounted Build America bonds rather than traditional general obligation bonds. The urgency for approval, he says, is necessary to take advantage of the short window offered to local governments by the federal government to issue more affordable bonds in a tight financial market. The public notice claims the Marion Co. Building Authority and not the HHC plans to issue both general obligation bonds and revenue bonds as part of the proposed $703 million in borrowing, which also contradicts Gutwein's claims; the HHC will lease the new hospital property from the building authority. Gutwein specifically claimed at the McANA meeting that no revenue bonds were being issued, which is contradicted by the public notice. Other than property taxes, HHC really has no credit-worthy revenue streams to pledge for revenue bonds. It appears the revenue bonds will be secured by unspecified lease payments the HHC will be required to make to the building authority.

Pressed by tough questions at a public meeting in Speedway last week, Gutwein made more contradictory statements according to the Speedway Navigator. It turns out that only a small fraction of the bonds will be issued through the Build America discounted bond program. The Speedway Navigator noted Gutwein's previous claim that the HHC has $150 million in cash reserves to put towards the project, but it says Gutwein indicated that only $120 million of the more than $700 million bond issue will be represented by Build American bonds. More than $600 million of the bond debt will be represented by those general obligation bonds, repayment of which is based on a pledge to levy sufficient taxes from Marion County property taxes to cover the debt. The HHC will need a minimum of $38 million annually to cover the debt service on the bonds.

According to Gutwein's presentation in Speedway, Wishard spends about $25 million annually on maintenance and operating expenses on the existing Wishard campus. Gutwein doesn't detail what those annual expenses will be on the new hospital, but he leaves the public with the impression that the costs will be considerably less with a new building. Marion County taxpayers have learned the hard way with the Central Library and Lucas Oil Stadium, however, that new buildings can actually cost more to maintain than the older buildings.

Gutwein continuously repeats a claim that the HHC has been so successfully operated that it has been able to reduce its current property tax levy. That claim is contradicted by HHC's Treasurer, Dan Sellers. As he noted in a transmittal letter dated August 4, 2008 concerning the HHC's 2009 proposed budget, the legislature mandated the property tax reductions as part of the property tax relief measures contained in the 2008-09 state budget. As he further notes, the State of Indiana paid $40 million in property tax replacement revenues to the HHC out of the state's general fund. The City-County Council's passage of the controversial 65% increase in the local option income tax in 2007 provided an additional $6.7 million in revenues in the 2009 budget.

As of 2007, the HHC had long-term liabilities totalling more than $253 million. Instead of purchasing the 26 nursing homes the HHC acquired in recent years as a new line of business, the HHC financed their purchase through lease agreements with Eagle Care, Inc. of Indianapolis. Much of the HHC's long-term debt is represented by these capital leases. The HHC does not operate any of the nursing homes. Instead, it leases them to American Senior Communities, a for-profit nursing home company, which runs all of the facilities. If the HHC issues more than $700 million in new bonded indebtedness, it appears it will violate a state law limiting the HHC's legal debt limit, which is 0.67% of the assessed value of Marion County property. According to the 2007 audited financial statements for HHC, its legal debt limit was a little more than $299 million. As of 2007, the HHC had used up about $45 million of that debt limit with a legal debt margin of $255 million. It is unclear to me how the HHC can issue this much additional debt without running afoul of the state debt limit. I could not find any language in the massive state budget bill adopted in June that provided for the hospital referendum that increased the legal debt limit for the HHC. Are the bonds being issued through the Marion Co. Building Authority to avoid the statutory limit?

As I've started looking at the audited financial statements the HHC belatedly made available via the Internet, I'm finding a lot of contradictory information. These financial statements from my initial read provides no comfort to Marion Co. property taxpayers that the HHC will ever be able to finance the construction of this new hospital without raising property taxes. For all intents and purposes, the bonds that will be sold to investors carry with them the assurance that property taxes can and will be collected to satisfy the debt obligation. I don't know why Marion County property taxpayers should make any different assumption, notwithstanding the claims of Gutwein and all of the other proponents of this project to the contrary. It's a real scam on the voters of Marion County that the language that will be put in front of them at the referendum is a question that omits the fact that it's a hospital that is being constructed, the amount of money that is being borrowed and the fact that property taxes can be levied to pay for the bonds. The fact that the HHC went to such great lengths to mislead voters on this project should serve as a wake-up call to all concerned taxpayers.

UPDATE: The City-County Council may not be off the hook on the Wishard Hospital bond issue. Another Indiana statute, as fellow blogger Paul Ogden points out, may require the building authority to obtain council approval to issue the bonds and lease the new facilities to HHC. See the language at the tail end of this statute:

IC 36-9-13-22Powers and duties of board of directorsSec. 22. (a) Except as provided in subsection (b), the board of directors of a building authority, acting in the name of the authority, may:(1) finance, improve, construct, reconstruct, renovate, purchase, lease, acquire, equip, operate, maintain, and manage land, government buildings, or systems for the joint or separate use of one (1) or more eligible entities;(2) lease all or part of land, government buildings, or systems to eligible entities;(3) govern, manage, regulate, operate, improve, reconstruct, renovate, repair, and maintain any land, government building, or system acquired or financed under this chapter;(4) sue, be sued, plead, and be impleaded, but all actions against the authority must be brought in the circuit court for the county in which the authority is located;(5) condemn, appropriate, lease, rent, purchase, and hold any real or personal property needed or considered useful in connection with government buildings or systems regardless of whether that property is then held for a governmental or public use;(6) acquire real or personal property by gift, devise, or bequest and hold, use, or dispose of that property for the purposes authorized by this chapter;(7) enter upon any lots or lands for the purpose of surveying or examining them to determine the location of a government building;(8) design, order, contract for, and construct, reconstruct, renovate, and maintain land, government buildings, or systems and perform any work that is necessary or desirable to improve the grounds, premises, and systems under its control;(9) determine, allocate, and adjust space in government buildings to be used by any eligible entity;(10) construct, reconstruct, renovate, maintain, and operate auditoriums, public meeting places, and parking facilities in conjunction with or as a part of government buildings;(11) collect all money that is due on account of the operation, maintenance, or management of, or otherwise related to, land, government buildings, or systems, and expend that money for proper purposes;(12) let concessions for the operation of restaurants, cafeterias, public telephones, news and cigar stands, and vending machines;(13) employ the managers, superintendents, architects, engineers, consultants, attorneys, auditors, clerks, foremen, custodians, and other employees or independent contractors necessary for the proper operation of land, government buildings, or systems and fix the compensation of those employees or independent contractors, but a contract of employment may not be made for a period of more than four (4) years although it may be extended or renewed from time to time;(14) make and enter into all contracts and agreements necessary or incidental to the performance of its duties and the execution of its powers under this chapter;(15) provide coverage for its employees under IC 22-3 and IC 22-4; and(16) accept grants and contributions for any purpose specified in this subsection.(b) The building authority in a county having a consolidated city may not purchase, construct, acquire, finance, or lease any land, government building, or system for use by an eligible entity other than the consolidated city or county, unless that action is first approved by:(1) the city-county legislative body; and(2) the governing body of the eligible entity involved.

WRTV's Joanna Masseeasks a simple question of Department of Waterworks Executive Director Matt Klein about why Indianapolis water users should be expected to pay for another water rate increase after the IURC gave approval to an 11% increase earlier this summer. Massee interviewed me for her story today, and I explained to her that the department was not doing its part at cost reductions before asking ratepayers to dig deeper into their pockets. Klein claimed vendors are helping with cost reduction, although he didn't elaborate on those efforts. His only consolation to ratepayers is that customers would be facing even higher rates if the water company wasn't doing such a good job at cost cutting. Massee asked of Klein, "Should customers have to expect to pay more and more to get the department out of the hole?" His answer: "The customers should expect that the utility is a well-run operation and that the water company has the managerial, technical and financial capability to run this utility and that's what our team is doing." Pressed further by Massee, Klein says the additional rate increase, which he would not specify the amount of at this time, was necessary to fund federally-mandated capital improvements. As I've previously written about, the IURC determined in its order allowing the 11% increase earlier this summer that these capital projects could not be substantiated. The IURC criticized the water company for failing to make cost reductions. It was particularly critical of its one-sided agreement with Veolia to manage the water company, an agreement the IURC described as "profoundly disturbing."

Thursday, September 24, 2009

WTHR's Sandra Chapman raises questions tough reporters should be asking when deals made at taxpayer expense appear to reward key decision-makers. Perry Township Trustee Gary Coons was the driving force behind the recent merger of the township fire department into the Indianapolis Fire Department, a deal that works out well for Perry Township taxpayers but will prove costly to Marion County taxpayers over the long haul. No sooner had the deal been inked than Coons landed a $64,000 a year job as public liaison for the Public Safety Department, a step down from the job he had requested as Public Safety Director. Coons continues to hold his full-time elected Trustee's position. Chapman reports:

On September 5th, Mayor Greg Ballard welcomed Perry Township Fire into the realm of city control. Three days later on September 8th, Perry Township Trustee Gary Coons, the driving force behind the merger, started a new job at the Department of Public Safety.

Critics charge the job is a reward, but say the deal fell short of giving Coons the top director's job he wanted.

Mayor Ballard tells 13 Investigates he never made any such promise for the top safety post.

"We just don't do that sort of thing. It's my decision," Ballard said. But the mayor also had good words for Coons. "He's a good man. Understand, he did a very courageous thing down there when as a trustee he said, 'Yes, I think my fire department has to go into IFD.'"

Coons says he did in fact apply for the public safety director post, but says the offer as a liaison in the department was too good to pass up. His duties: to negotiate future mergers, plan for special events including the Super Bowl, and acquire federal grants. It's a job that comes with an annual salary of $64,000.

13 Investigates asked Coons, "Was there a back room deal for you to move into this if you did XYZ or were you promised anything from the city?"

Coons responded, "I was never promised and there was never a back room deal."

The public safety job is in addition to the $51,000 he already earns providing poor relief as the Perry Township Trustee.

"What I do is, I go there in the evening or early morning and then I go in on weekends. I don't think I should earn a full time salary by no means," Coons said, explaining how he juggles the workload.

Not surprisingly, Coons shamelessly uses the fact that he suffers from Parkinson's Disease as a deflection to his self-dealing. Mayor Ballard insisted that no deal was made with Coons, but his explanation simply rings hollow. Why else would Coons land a job just days after the merger deal was approved if there wasn't a quid pro quo?

During last year's presidential election, I told you about how an expert who had studied the literary style of Barack Obama's "Dreams From My Father" autobiography and compared it to that of long-time Obama pal, terrorist William Ayers, concluded that Ayers had actually written the book. Well, author Christopher Andersen confirms in his new book, "Barack and Michelle: Portrait of a Marriage" the conclusion reached by that expert. Here are some exerpts from his book:

Andersen, in "Barack and Michelle: Portrait of a Marriage," writes that Obama was faced with a deadline with the Time Books division of Random House to submit his manuscript after already having canceled a contract with Simon & Schuster. Confronted with the threat of a second failure, his wife, Michelle, suggested he seek the help of "his friend and Hyde Park neighbor Bill Ayers."

Obama had taped interviews with relatives to flesh out his family history, and those "oral histories, along with a partial manuscript and a truckload of notes, were given to Ayers," writes Andersen.

The author quotes a neighbor in the Hyde Park area of Chicago where Obama and Ayers lived, who says of the two, "Everyone knew they were friends and that they worked on various projects together."

"It was no secret. Why would it be? People liked them both," the neighbor said, according to Andersen . . .

In the end, Ayers's contribution to Barack's "Dreams from My Father" would be significant – so much so that the book's language, oddly specific references, literary devices, and themes would bear a jarring similarity to Ayers's own writing.

Andersen concludes, "Thanks to help from the veteran writer Ayers, Barack would be able to submit a manuscript to his editors at Times Books."

Andersen relied on inside sources, quite possibly Michelle Obama, to describe how "Dreams" was published, Cashill says. Andersen cites Cashill as a source, but Cashill points out in a fresh WND column today that Andersen "clearly has access to inside information that I did not have."

Yeah, just another so-called Obama conspiracy that has been proven to be factual. How many more things are we going to learn about a man we knew little about before electing him to the highest office of the land?

Help me out here. I've always thought that any for-profit business has to pay property taxes in Indiana. Well, that may not be the case in Indiana for for-profit nursing homes thanks to another item hidden away in the state budget adopted during the special session in June. According to the LogansportPharos-Tribune's Jennifer Tangeman, attorneys for nursing homes have been instructing them to file for tax-exempt status and seek refunds for up to the past 10 years for taxes they've paid on their nursing homes as a result of a new law passed during the special session. Tangeman writes:

County council president Ralph Anderson had announced at the meeting that a law had been passed to allow for-profit nursing homes to file for an exemption from property taxes.

County Assessor Judy Lewis said she understood that any for-profit nursing home could apply to receive future tax exemptions, as well as a refund for already-paid taxes back to the year 2000.

“They can ask for all of the money back from the last 10 years,” Lewis said.

McClain said that wasn’t the intent of the amendment.

“In this special session budget bill was a statement that basically says if you are a not-for-profit and you did not file, you have until Sept. 1 of this year to file that, but you have to be a not-for-profit, or 501(c)3, to get that special tax exemption,” he said.

Law firms across the state, however, have been filing for the exemption for for-profit nursing homes. Pete Mallers, an attorney with Beers Mallers Backs and SalinLLC of Fort Wayne, filed on behalf of Logansport’s Woodbridge Health Campus, and he contends for-profit homes are eligible for the exemption.

“Indiana law changed a number of years ago in a court decision that opened up the exemption status for nonprofit nursing homes as well as for-profit nursing homes,” Mallers said. “But the Indiana General Assembly passed legislation last summer that broadened the scope of that and allowed tax-exempt entities that had not previously filed for the tax exempt status to file for refunds.”

Mallers said the statute was clear in stating that for-profit nursing homes can file.

“It has been Indiana law for a number of years,” he said. “And many, many people were not aware of that. Filing for the exemption is completely within the confines of the law. Otherwise it would not have been done.”

According to Mallers, the only difference is that now those entities can apply for a decade’s worth of refunds.

Lewis noted that disagreement could have a huge impact on the county budget. She noted that the refunds for Woodbridge Health Campus and Camelot Care Centers would total around $30 million . . .

State Rep. Rich McClain (R-Logansport) insists the county officials are misinterpreting the law and cites other cases that have been turned down elsewhere by the Indiana Tax Court, including a case filed in Hamilton County. Marcia Oddi of the Indiana Law Blog, who has studied the multiple surprises to be found in the state budget bill more than anyone, says she can't find the exemption languagediscussed in this news story.

Gee, I wish Mayor Greg Ballard would meddle in the affairs of the CIB and can a few people there for gross fiscal mismanagement like he is meddling with the Indianapolis Animal Control & Care agency. Yesterday, Mayor Ballard sacked the chairman of the agency's advisory board, Warren Paititz, who warns the community that the Mayor's action is just a prelude to the firing of the agency director, Douglas Rae, who has been on the job since the first of the year trying to clean up the cesspool of political cronyism that has plagued the agency for years. The Mayor's office didn't believe Paititz focused enough attention on catching stray dogs. "We want their function to be out in the neighborhood protecting our citizens," Paul Okeson, the mayor's chief of staff, told the Star's Heather Gillers. "Residents have long complained about the time it takes to catch stray dogs -- sometimes days," Gillers reports. Paititz had been appointed by Ballard and had served for about a year.

Greg Brush, the CEO of Feral Bureau of Indiana, Inc., lashed out at Mayor Ballard's decision. "[I]t seems likely that the city plans to massively gut IACC as it exists today, and erase progress toward the vision of a more humane shelter as championed by Rae," Brush said. "While it was in the news this evening that the mayor is creating an education program for bike path awareness, in his 1-3/4 years in office, he has yet to publicly comment on the operation of the city's shelter, abuse of the animals at the shelter that occurred in 2008, or subsequent hiring of Rae by former public safety Director Scott Newman," Brush continued. "It seems a sad, but very telling demonstration of the callous disregard by the Ballard administration for the tens of thousands of lives of animals that pass through the city shelter, choosing instead to hide behind unproven claims that the public is less safe from animals than a year ago."

Brush complained that a junior level staffer in the Mayor's office called and dismissed Paititz over the telephone only two hours before the regularly-scheduled monthly advisory board meeting, which was subsequently cancelled by the Mayor's office at the last minute. The advisory board is required by city ordinance to meet on a monthly basis.

Wednesday, September 23, 2009

The former CEO of National Lampoon, Inc., Daniel Laikin, pleaded guilty in a federal court in Philadelphia today to charges he conspired with others to manipulate the price of National Lampoon's shares. PRNewswire explains Laikin's crime:

As part of this conspiracy, Laikin enlisted a number of other individuals to help him artificially inflate the price of the stock. Specifically, Laikin paid kickbacks to individuals to generate buying in the stock, that was not based on free market forces, to make it appear as if there was significant interest in the stock when, in fact, there was little or no such interest. Laikin also provided non-public information to his co-conspirators, including information regarding the company's unannounced financial results. He also coordinated press releases to provide a pretext for their increased buying. Laikin's goal was to induce real buying from the public so as to artificially increase the price of the stock. As part of his plea, Laikin acknowledged that he intended to cause between $2.5 million and $7 million in losses through this scheme.

Laikin faces up to five years in prison, three years of supervised release, a $250,000 fine, and a $100 special assessment when sentenced on Jan. 13, 2010. Laikin also faces separate civil charges from the United States Securities and Exchange Commission.

The case was investigated by the FBI and the United States Securities and Exchange Commission. It is being prosecuted by Assistant United States Attorneys Derek A. Cohen and Louis D. Lappen.

Indianapolis businessman and National Lampoon shareholder/officer Tim Durham took the reins of the company following Laikin's indictment last year. A shareholder derivative suit was brought earlier this year in connection with another Durham-controlled company, CLST Holdings, which accused him and two of his business partners of self-dealing. Laikin's brother, Robert, is CEO of Indianapolis-based Brightpoint.

The double-digit water rate increase for which the Ballard administration sought and obtained approval earlier this summer just won't cut it. Earlier this year the administration sought a 17% emergency rate increase to deal with huge losses the Indianapolis Water Company sustained from high-risk derivative, adjustable rate bonds, but the IURC cut that increase to 11%. The City will file the request for a rate increase by the end of this month according to WTHR, but Executive Director Matt Klein of Indianapolis Waterworks won't say how much the increase will be. He says the additional money is needed for capital projects. In reducing the earlier rate increase, the IURCtook the City to task for its one-sided agreement with Veolia, which pays out more than $40 million a year to the French-owned company to run the IWC and rewards the company with multi-million dollar bonuses that are not tied to performance. The Ballard administration responded to the IURC ruling by hiring more consultants for advice on how to respond to the ruling. The Ballard administration didn't create this mess, but it sure is determined to punish Indianapolis residents as much as possible in order to reward campaign contributors with costly contracts. And let me remind my Republican friends, who might object to the words tax increase in the context of discussing a water rate increase, that increases in fees and rates were counted as tax increases by Republicans during the 2007 race to unseat the tax and spend administration of former Mayor Bart Peterson.

He's been sending mixed signals, but the latest signals former State Rep. Dan Dumezich has been sending suggests he plans to jump into the Republican primary race for the right to challenge Sen. Evan Bayh (D) next year. WIBC's Eric Berman has this bit of information on comments Dumezich made today as he prepared to hold a town hall meeting in Fishers tonight which suggest he's gearing up for a run:

Former Schererville Representative Dan Dumezich isn't announcing his plans for a couple more weeks, but has been holding town meetings across the state, including one in Fishers on Wednesday night. He accuses Bayh of opportunism, shifting toward the center only when there's an election coming up . . .

And Dumezich says he beileves news stories about the corporate board work of Bayh's wife Susan has prompted voters to take a closer look at Bayh's record. Susan Bayh has served on as many as eight corporate boards, including WIBC parent company Emmis Communications. Her service on the board of Indianapolis health insurance giant WellPoint has prompted some activists on both sides of the aisle to question whether Sen. Bayh has a conflict of interest in the health care debate.

Dumezich blasts what he calls proposals for a government takeover of health care, but all the candidates frame their opposition to Bayh in terms of broad disagreement with Obama's philosophy, accusing him of bloating federal spending in the name of making government bigger.

Who is telling the truth? First Lady Michelle Obama recounts a scare she and Barack experienced when their daughter Sasha became ill as an infant. Michelle says the doctor thought it might be meningitis, but it turned out to be something far less serious. President Obama remembers an entirely different story. She had meningitis and it was touch and go for a few days he recounts in the video above. A new book about the Obama's marriage by Christopher Andersen recounts Obama's version of the story that Sasha had meningitis but with a sharp twist on the story for the President as he discusses their marital problems at the time. "As 3-month-old Sasha cried unconsolably that night in September 2001, Obama got out of bed, came into the room and asked, 'Jeez, Michelle -- Can't you get her to stop?' Andersen writes. Michelle "whirled around and shot her husband a withering glance," Andersen wrote. The President has similarly misrepresented the health care experiences of other Americans in an effort to demonize health insurance companies.

Tuesday, September 22, 2009

My City-County Councilor, Doris Minton-McNeil, has not been showing up for council meetings since news reports of a 911 call made by a neighbor accusing her of driving recklessly and almost hitting the woman's daughter and her seven-week-old daughter surfaced late last month. Last night was one of the most important council meetings of the year. Councilors adopted the 2010 City-County budget. Minton-McNeil failed to attend the meeting. Perhaps she has a legitimate excuse for missing important council meetings, but it seems she and the Marion Co. Democratic Party owe it to the people who live in her district to explain her absence. After all, the Democrats appointed her to fill the seat vacated by Andre Carson when he was elected to Congress. She was not elected by the people of her district.

UPDATE: I love it when the news media follows my lead on stories. WRTVasks the same question I asked and learned from Minton-McNeil that she has taken a "leave of absence" from her council duties, but she failed to elaborate on the reason for her leave. Marion Co. Democratic Chairman Ed Treacy claims the councilor had been hospitalized for "high blood pressure" and is now recovering at home. "All I know is that she has been ill and, hopefully, from what she said, she's on the mend," Tracy told WRTV. "I would assume by the next meeting she'll be back."

So the Marion Co. Health & Hospital Corporation begins its effort to gain public support to build a new $754 million hospital by getting one state lawmaker to slip into the state budget in the dark of night a provision to allow for a costly special election this November to consider a referendum that authorizes it to borrow the money needed to build the hospital. It prepares misleading referendum language that continues to keep people in the dark as to what is being proposed, such as the amount of money that is being borrowed, the annual cost of borrowing the money and where the money will come from to pay for the debt. And just to ensure complete darkness, the HHC refuses to make publicly available its past audited financial statements. Yet it can take the time to illegally use taxpayer resources to lobby for passage of this referendum, including a link from its own website (still absent of any audited financial statements) to a website promoting approval of the referendum that once again is long on propaganda and short on facts. Gee, if I didn't know better, I would think someone is trying to hide something very important from the public. That's pretty scary when you consider the HHC is a publicly-owned organization that is funded with taxpayer dollars. And these people expect you to believe they can borrow three quarters of a billion dollars without raising taxes one dime.

UPDATE: There audited financial statements for HHC from 2004 to 2007 can be found at this hidden link on their website. You would never find these if you weren't told that the link existed, notwithstanding the snarky remarks of the commenter who provided the link.

Monday, September 21, 2009

Democratic precinct committeepersons in Lawrence Township have chosen attorney Russell Brown to fill the position vacated by Mike Hobbs after he recently pleaded guilty to stealing $500 and was forced under Indiana law to give up his elected post. It is refreshing to see the Democrats pick a well-qualified person like Brown for a change. Brown unsuccessfully challenged State Sen. Jim Merritt (R) in 2006.

City attorneys have failed in their efforts to block a lawsuit filed by fellow blogger and attorney Paul Ogden on behalf of several citizens against the City and the Indiana Sports Corporation for violating the terms of a restrictive covenant governing the use and disposal of the public area downtown known as the Pan Am Plaza. At issue is whether the Indiana Sports Corporation should have been required to repay millions of dollars to the City of Indianapolis when the City authorized the sale of the Pan Am Plaza to a politically-connected real estate developer at the close of Mayor Bart Peterson's administration in 2007. An original restrictive covenant governing the use of this land for public use required repayment of taxpayer funds used to redevelop the site--as much as $6 million--in the event the ISC stopped using the property for a public use.

Marion Superior Court Judge Heather Welch ruled in an Order signed on September 21, 2009 that the citizen plaintiffs have standing under public standing doctrine because they "are attempting to enforce a public not a private right in this case when trying to prohibit the MDC and the City of Indianapolis from reducing the restrictive covenant area which was created when the area now known as Pan Am Plaza was transferred to ISC." Judge Welch continued, "The restrictive covenant was created to allow a public gathering at Pan Am Plaza for the enjoyment of citizens of the City of Indianapolis." "Thus, there is no doubt that the Plaintiffs qualify under the public standing doctrine by attempting to enforce a public right by claiming that the government action was improper and not in accordance with the statute."

Judge Welch ruled against the City's motion on the pleadings arguing that the disposal of Pan Am Plaza came about as a result of a project agreement and not a redevelopment plan. In the case of the former, no approval by the city council is required, whereas the latter requires council approval. "It is clearly confusing as to whether these documents were redevelopment plans or project agreements," she writes." Judge Welch also rejected the City's argument that no triggering event had occurred--until the restrictive covenant is completely dissolved. Judge Welch ruled that there exists "a dispute of material fact" whether a "substantial reduction of the restrictive convent is the triggering event" as the plaintiffs contend. Finally, Judge Welch rejected the City's specious argument that the suit should be dismissed because the plaintiffs' counsel failed to give notice to the City under the tort claims act. "The restrictive covenant that is at issue in this case is an express contract between the City of Indianapolis by MDC and ISC", Judge Welch ruled, noting that the plaintiffs complaint alleged no tort claims.

Judge Welch sided with the City's attorneys only on one point. That pertained to a statute that requires the MDC to determine compliance of a redevelopment plan with the comprehensive plan of development. Judge Welch determined that it would not matter whether the 2007 action involved a redevelopment plan or a project agreement because the statute in question did not require city council approval in either event. Accordingly, she granted the City's motion to dismiss the plaintiffs' claim based on this statute.

If you want to get a fair analysis of the referendum up for consideration in the November special election to authorize the Marion Co. Health & Hospital Corporation to borrow money to build a $754 million hospital to replace Wishard Hospital, you will have to turn somewhere other than the local news media. Every single media organization in Indianapolis has decided that the referendum is worthy of passage and has decided no voices opposing the referendum will be heard. Even our public access television station, WCTY, is being used to promote passage of the referendum without equal time being offered to those who oppose it. HHC CEO Matt Gutwein actually announced during his testimony before the Municipal Corporations Committee recently that "there is no opposition to the referendum." So everywhere you turn you are being told that the new hospital is absolutely necessary and your taxes will not need to be raised to construct this new hospital. Both premises are completely false. You will be told in a few short years that your taxes will have to be raised because revenues weren't as good as they anticipated and costs exceeded initial estimates. You can take that to the bank. The extent of the lies being told by the proponents of the referendum reveal them for who they truly are. It's a disgrace that there isn't a single member of the local news media willing to stand up and tell the people the truth about this matter.

UPDATE: The Greater Indianapolis Chamber of Commerce released an endorsement in support of the referendum today so you know it will lead to higher taxes. The organization has supported every major public works project proposed, all of which eventually led to higher taxes over the past two decades. "The Chamber’s Fiscal Policy Council and the Executive Committee of the Board thoroughly reviewed details of the project and expressed confidence in Wishard’s plan to fund the construction through a bond issue requiring no tax increase," the press release reads. The Chamber of Commerce supports it strictly for the benefit of the cartel of construction-related businesses that make beaucoup bucks off these projects. These self-serving insiders must have a new public project of this magnitude ready to come on line every three to four years to allow for the skimming and kickbacks associated with these projects. It has nothing to do with good public policy. It's all about lining the pockets of people who care nothing about their community. The Chamber's statement claims HHC provides an annual economic impact of $1.2 billion and creates 4,000 jobs. Wouldn't you know it. The Chamber touts the economic impact of an organization wholly funded by taxpayers money.

Friday, September 18, 2009

Both the Senate and U.S. House of Representatives voted overwhelmingly this week to cut off federal funding to ACORN in the wake of explosive undercover videos showing workers for the organization promoting prostitution and tax fraud, among other things. U.S. Rep. Andre Carson (D-IN) joined 74 of his Democratic colleagues in opposing a Republican-authored amendment to student aid legislation to cut off all federal funding for the controversial organization. Why am I not surprised? All other senators and representatives from Indiana voted to cut off funding to the organization.

Well, if you want to see an example of how incompetent management can take a perfectly sound, 140-year-old community bank and bring it to the brink of insolvency in a matter of a few short years, you need only look to Columbus-based Irwin Financial Corp. Federal and state regulators closed the two banking divisions of Irwin late this afternoon according to the IBJ:

State and federal regulators late this afternoon shut down the two banking subsidiaries of ailing Irwin Financial Corp. of Columbus.

The action makes Irwin Union Bank and Irwin Union Bank FSB the first financial institution failures in Indiana since steep losses hit the industry last year. Irwin Union Bank, founded in 1871, was one of the state’s oldest banks.

The Federal Deposit Insurance Corp. has brokered the sale of Irwin’s banking operations to First Financial Corp. of Cincinnati, First Financial said in a statement late this afternoon.

“Since all deposits are being assumed by First Financial Bank, there will be no losses to any depositor,” First Financial CEO Claude Davis said in the statement.

Irwin Financial operated about two dozen bank branches, many of them in central Indiana.

Earlier this week, Irwin Financial disclosed in a Securities and Exchange Commission filing that regulators ordered it to bolster its capital by the end of the month to levels it had “no realistic prospect of achieving.”

Irwin has been under special regulatory oversight since last fall, in part because of steep losses on home equity loans. It has lost $450 million over the last six quarters.

The company has tried for months to raise additional capital, to no avail. Last fall, it announced plans for a $50 million stock offering, with Cummins Inc. committing to buy up to $25 million of the shares.

But Irwin canceled that offering Aug. 31. In a filing with the SEC, the company said it had been unable to move forward “due to adverse market conditions for almost all financial institutions and its inability to date to participate” in any of the government programs aiding the ailing industry.

Irwin traces its roots the Civil War era. It help fund the launch of Cummins and the auto parts company that became Arvin Industries. Arvin was acquired by a Michigan competitor in 2000, but not before growing to become a Columbus powerhouse in its own right.

This outcome was so easily avoided. Bank managers left the Indiana market it had done so well in for greener pastures in Nevada and California, where it foolishly invested about a billion dollars in the risky home equity loan market. Not surprisingly, the default rate on those loans turned out to be pretty high after the housing market collapsed. Why would a bank that had so many years of success as a community bank in Indiana do something so stupid? The bank managed to survive several panics and the Great Depression following the Civil War but falls victim to high risk mortgage loans. Unbelievable. It becomes the first Indiana bank to fail during this latest banking crisis. First Financial is assuming control of Irwin's branches.

Once the U.S. Supreme Court closely scrutinized Indiana's Voter ID law last year and held that it satisfied equal protection concerns under the U.S. Constitution, Gov. Mitch Daniels and Secretary of State Todd Rokita were relieved of any concern that the law could be successfully attacked in the courts. Or so they thought. What they had not considered was that a Democratic panel of Court of Appeals judges in Indiana would toss aside years of equal protection jurisprudence under the Indiana Constitution to reach a completely opposite outcome than reached by the U.S. Supreme Court.

Indiana lawyers rarely invoke Indiana's Article 1, Section 23 when raising equal protection claims in litigation and for good reason. The standard of scrutiny developed by the Indiana Supreme Court under Article 1, Section 23 is the lowest possible standard, a much lower standard than the U.S. Supreme Court applied in holding that Indiana's Voter ID law does not run afoul of the Equal Protection Clause. Judge James Kirsch, one of the three Democrats signing on to Judge Patricia Riley's opinion striking down the statute, is quite familiar with this undisputed fact. Four years ago, Judge Kirsch joined in an opinion by Judge Michael Barnes, Morrison v. Sadler, which held that Indiana's Defense of Marriage Act does not deprive same-sex couples in Indiana of the right to equal protection under the Indiana Constitution. "Unlike federal equal protection analysis, there is no varying or heightened level of scrutiny based on the nature of the classification or the nature of the right affected by the legislation," Judge Barnes wrote. Barnes goes on to explain the standard applied by our Supreme Court:

The State has no burden to demonstrate that the statute is constitutional; the burden is entirely upon the Plaintiffs to overcome the presumption of constitutionality and to establish a constitutional violation. See Dvorak v. City of Bloomington, 796 N.E.2d 236, 239 (Ind. 2003). Enactments challenged under the Indiana Constitution are presumed to be constitutional until clearly overcome by a contrary showing, and any doubts are resolved against the party bringing the challenge. Id. at 237-38. The party challenging the statute must “negative every conceivable basis which might have supported the classification.” Collins, 644 N.E.2d at 80 (quoting Johnson v. St. VincentHosp., 273 Ind. 374, 404-05, 404 N.E.2d 585, 604 (1980)). Collins requires only that the disparate treatment accorded by legislation, not the purposes of the legislation, be reasonably related to the inherent characteristics that distinguish the unequally treated classes, although legislative purposes may be a factor considered in making the reasonable relationship determination. Dvorak, 796 N.E.2d at 239. However, our supreme court has also stated that it will not “inquire into the legislative motives prompting such classification.” Collins, 644 N.E.2d at 80 (quoting Chaffin v. Nicosia, 261 Ind. 698, 701, 310 N.E.2d 867, 869 (1974)). Rather, “[l]egislative classification becomes a judicial question only where the lines drawn appear arbitrary or manifestly unreasonable. So long as the classification is based upon substantial distinctions with reference to the subject matter, we will not substitute our judgment for that of the legislature . . . .” Id.

Judge Barnes notes in his opinion the overwhelming task a plaintiff has in proving that a state statute violated Indiana's Article 1, Section 23. "The practical effect of Collins and cases following it is that statutes will survive Article 1, § 23 scrutiny if they pass the most basic rational relationship test," he writes. "In fact, our research has revealed that of the approximately ninety reported 'Equal Privileges and Immunities' cases following Collins and its clarification of Article 1, § 23 analysis, only three have finally resulted in holdings (after supreme court review) that a particular statute violated Article 1, § 23." Barnes added, "No statute or ordinance has ever been declared facially invalid under the Collins test.

It's quite a rarity indeed as Judge Barnes notes for an Indiana court to rule an Indiana statute violates the state's equal protection clause, particularly when that same statute has already survived scrutiny under the higher standard imposed by the U.S. Constitution's Equal Protection Clause. Barnes discussed the two most recent cases where the statute fell short of Indiana's low standard. One case involved a challenge to the 2-year statute of limitations in Indiana's Medical Malpractice Act as applied only to particular plaintiffs. The other case involved a provision of Indiana's Medicaid law that prevented a pregnant woman from access to an abortion where the pregnancy posed "a serious risk of substantial and irreversible impairment of a major bodily function."

In striking down Indiana's Voter ID law, the three- judge panel was constrained by the Collins test. Judge Riley conceded in her opinion that the statute did not affect a person's qualification to vote but rather "a regulation of the time, place, or manner in which otherwise qualified voters must cast their votes." The state insisted Indiana's Voter ID law doesn't impose an arbitrary rule because people who vote in person are subject to the photo ID requirement and those who vote by absentee ballot are not. As the state explained its rationale:

The General Assembly was simply acknowledging and accommodating a few basic self-evident realities: (1) regardless of where they live, all seniors and disabled voters can vote absentee and need not provide photo identification in doing so; (2) seniors and the disabled living in licensed care facilities that are not polling places may be likely to vote absentee in order to avoid the travel required for voting; (3) seniors and the disabled who live in care facilities that are polling places may be more likely to vote in person because they will not have to travel to do so; (4) seniors and the disabled who live in care facilities would likely have particular difficulty traveling to obtain photo identification; and (5) seniors and the disabled who vote in person in the facilities where they live are likely to be identifiable as residents by election officials and unlikely to commit fraud by intentionally misidentifying themselves.

Judge Riley's opinion essentially concludes that the class exception created for absentee voters in certain state-licensed facilities is "based in part upon an arbitrary or unnatural characteristic which grants an unequal privilege or immunity to residents of state licensed care facilities which also happen to be polling places and fails to treat persons similarly situated uniformly." In other words, she is striking down the entire statute because the state law makes it easier for elderly persons living in state-licensed facilities that happen also to be polling places than other persons who vote in person at that polling location. Judge Riley concedes that the photo ID requirement itself for in-person voters does not violate Indiana's equal protection requirement. Yet, she found the differing treatment of absentee voters and a small number of persons living at state-licensed facilities where polling places are located as sufficient reason for striking down the law. She writes:

It seems that the inconsistent and impartial treatment favoring voters who reside at state care facilities which also happen to be polling places could be excised from the Voter I.D. Law without destroying the primary objectives of the Law. However, the same cannot be said for the inconsistent and partial treatment favoring absentee voters who choose to mail their votes without destroying the opportunity for mailing votes. There may be different ways in which the inconsistent and partial treatment of the Voter I.D. Law could be cured, but it is not our task to form suggestions for legislation . . . Therefore, we must reverse and remand, with instructions to the trial court that it enter an order declaring the Voter I.D. Law void.

Governor Daniels has been criticized by House Speaker Pat Bauer and others for being "intemperate" because of his sharp words about the opinion yesterday. Daniels called the opinion "preposterous" and "an act of judicial arrogance." Indeed, Riley's opinion relies on no Indiana judicial precedent for reaching such an extreme result as striking down the Voter ID law in its entirety. Short of overruling the Collins test previously adopted by our Supreme Court, most objective legal observers would agree that Riley's opinion is not supported by the law and will most certainly be overturned by our Supreme Court on review.

UPDATE: The Indiana Bar Association has taken Gov. Daniels to task for personally criticizing Judge Riley for her decision. The Indiana Law Blog reports on the statement issued by the IBA:

On Thursday, Sept. 17, the Indiana Court of Appeals issued a ruling in Indiana League of Women Voters v. Rokita, the “voter ID” case, and Gov. Mitch Daniels commented on the decision and the judges who heard the case. While the Indiana State Bar Association (ISBA) recognizes that Gov. Daniels has championed the cause of judicial independence, the State Bar is nevertheless compelled to emphasize that comments such as those attributed to the governor are not helpful in advancing appropriate respect for the courts and the judicial process, and honoring the separation of powers doctrine.

The ISBA respects the governor’s, and every citizen’s, right to disagree with the decision. There are rules, however, that govern judicial conduct and appropriate procedures for dealing with complaints about the judiciary. Comments about individual judges are not the way to express disagreement with any court opinion.

Daniels is licensed to practice law in Indiana; however, his law license has been in inactive status since 2003.

Fellow blogger Paul Ogden raises some serious questions about the motive behind the Ballard administration's efforts to eliminate the job of Telecom and Video Services Agency Director Rick Maultra. He suggests it's a battle over whether the City should be collecting right-of-way fees from utilities which provide video services as provided by state law. Ogden claims the City is effectively foregoing as much as $10 million in revenues it could be collecting from utilities. The City argues the fees would simply be passed on to consumers if it is collected. Ogden disputes that claim. Regardless, we're talking about more than chump change here. In tough times, every dollar of revenue adds up. City-County Councilors should be asking questions of the administration, which hasn't hesitated to raise other fees that fall directly on Indianapolis residents. Are utilities like AT&T getting special treatment from the City as Ogden suggests because a political insider's law firm represents the giant utility? And if so, why?

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